How producers benefit from cooperatives

LINCOLN, Neb. (KOLN) - In this story, the CEO of Central Valley Ag talks about how cooperatives bring economic power to farmers and Nebraska small towns.

“A co-op in its basic form is a group of people with common interests that works together economically to buy goods and services, and in our case, agricultural goods and services,” CVA CEO Carl Dickinson said. “Farmers are then able to collectively sell their goods and services together.”

Many people may not realize this, but cooperatives are farmer-owned. “In our organization, in order to be a member, you have to be a farmer to vote and sit on the board,” Dickinson said. “So, they are not only farmer-owned, they are farmer-directed.”

The theme of National Cooperative Month is “cooperatives build economic power.” Leaders of Nebraska cooperatives say that power is built in a number of ways. “First of all, we are an asset-based business,” Dickinson said. “We have a lot of grain facilities, and a lot of fertilizer facilities. What could the farmer do on his own? We do have farmers that have on-farm storage themselves. But, we have 102 million bushels of licensed storage that these farmers own together. So what they can do collectively is amazing. Second, cooperatives have purchasing power. We will sell about 550,000 tons of crop nutrients a year. Our ability to go to the marketplace is much better than individuals at the marketplace. And certainly not least, our farmers have built up a balance sheet at this cooperative in their equity over time. That allows us to then position ourselves further in the market and build additional assets. This allows us to invest, and brings value back to the farmers. With a strong balance sheet, and the economic power built up over time, our farmers then don’t absorb risk individually.”

The economic power of cooperatives have a ripple effect on small towns where they are located. “We have about 785 people working as full-time employees,” Dickinson said. “Cooperatives are the backbone of a lot of these small communities. Our people are mayors and members of city council. We invest in these communities. Our operation will spend about $47 Million on capital expenditures. It’s all part of the strong Nebraska agricultural story.”

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